BHP Group to review court decision on $31.53 billion Fundao dam claim
FILE PHOTO: A small toy figure and mineral imitation are seen in front of the BHP logo in this illustration taken November 19, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -BHP Group said on Friday it would review a Brazilian Federal Court decision regarding a 155 billion reais ($31.53 billion) government claim over the 2015 collapse of Fundao dam owned by Samarco, its joint venture with Vale.
The company said its unit BHP Brasil had not received a decision from the court, adding that the group would review its implication, potential for an appeal and any potential impact on its provision related to the dam’s collapse.
The court has issued an interlocutory decision ordering Vale, BHP and Samarco to pay 47.6 billion reais ($9.67 billion) in collective moral damages for the 2015 tailings dam burst that killed 19 people and led to severe pollution of the Rio Doce river.
This is one of the categories of damages sought in the $31.53 billion claim by the Federal Public Prosecution Office.
The parties have been in negotiations to seek a settlement of obligations under a framework agreement since 2021, and the talks are slated to resume in February this year.
BHP had set aside $3.7 billion in provision related to the Samarco dam failure, according to its 2023 annual report.
BHP said its unit is «fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil» through a not-for-profit foundation that was established following the dam failure.
«Although both companies’ balance sheets should be able to handle these outflows, we think this could drive lower capital returns over time/push net debt in BHP’s case through its $15bn target ceiling,» RBC analysts said in a note.
($1 = 4.9165 reais)
